A federal judge has entered a judgment of $51,471 against Perkiomenville Livestock and Sales over how it handled proceeds of cattle and hog sales in 1982 for a Northampton County farm couple.

The ruling of U.S. District Court Judge Daniel H. Huyett 3rd is in favor of the Farmers Home Administration, which initiated a civil suit against Perkiomenville.

The cattle and hogs were collateral on FmHA loans to Howard and Sherrie Hummel of Cherryville.

Assistant U.S. Attorney Steven Engelmyer explained that Perkiomenville auctioned off the animals and gave the proceeds to the Hummels - without getting FmHA clearance.

Perkiomenville was sued for the full amount, though all it got was commission on the sales.

The suit filed in late 1984 charged Perkiomenville with "conversion of government property" - namely, 47 beef cattle and 131 hogs - in which FmHA held a perfected security interest.

"The cattle and hogs were collateral for a $170,200 loan Howard and Sherrie Hummel had received from the FmHA," Huyett wrote.

"As security for the loan, the Hummels signed and executed a security agreement which granted the FmHA a security interest in all livestock, crops, farm and other equipment together with all property of a like nature acquired thereafter.

"The agreement contained a clause requiring the FmHA's prior written consent before the collateral was sold."

Huyett noted that the Hummels also executed a financing statement that FmHA filed in Northampton County Court, which perfected its security interest in the Hummels' property.

That statement also said that "disposition of such collateral is not hereby authorized." Huyett underlined "not" in that quote.

Between Jan. 18 and April 12, 1982, the Hummels - with Perkiomenville acting as commission broker - sold the beef cattle for $35,353. Between May 10 and June 21, 1982, the Hummels sold the hogs through Perkiomenville for $16,325.

The judge said FmHA contends that none of the proceeds of these sales was applied to the FmHA loan. And at the time this complaint and several others were filed, the Hummels owed $134,186 in principal and about $17,922 in interest.

The judge rejected two arguments Perkiomenville raised against the judgment:

- That the cattle and hogs represented "normal security" whose proceeds could be used for farm operating expenses rather than "basic security," which couldn't. Huyett said the livestock was listed in the Hummel documents.

- That a statute of limitations had run. Huyett said it hadn't.

Howard Hummel entered guilty pleas to two federal criminal counts of converting federal property and giving false statements to the FmHA over those 1982 dealings.

U.S. District Court Judge Edward Cahn in March 1984 put him on five years' probation and ordered him to make restitution of $98,000.

Howard Hummel, now of Weaversville, was back before Cahn early last month because he'd paid only $250 of the $98,000 restitution in nearly two years.

He said nearly half of his $200 weekly income in a farming operation was supposed to go for child support. Cahn said the government debt should come first.

At the end of a hearing, Cahn acknowledged the federal government wasn't going to get back anywhere near that $98,000. But he urged the defendant to try to work out some payment plan with his federal probation officer.